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Monday, 26 May 2003
Page: 14861

Mrs ELSON (2:33 PM) —My question is addressed to the Treasurer. Would the Treasurer advise the House of the results of recent surveys of business and consumer sentiment and how economic policy affects sentiment?

Mr COSTELLO (Treasurer) —I thank the honourable member for Forde for her question, and I can advise her that both consumer and business sentiment continue to be solid in Australia. The Westpac Melbourne Institute consumer sentiment index increased 1.9 per cent in May to a level about 10 per cent above its long-term average, which the authors of the survey said resulted in a string of positive developments since April, including a higher Australian dollar, share market gains, lower petrol prices and low interest rates. Business sentiment is also resilient, with the National Australia Bank monthly business survey released on 12 May showing that the index moved up one point to a measure of 0.6—a level that the National Australia Bank says is consistent with ongoing growth in the non-farm sector of around four per cent. The National Australia Bank says that it shows resilience, notwithstanding a weak and deteriorating situation evident in surveys in countries such as the United States, Europe and New Zealand.

One of the benefits of the government's economic management over the last seven years has been the reduction in Commonwealth debt from the $96 billion of net debt that the Labor Party left in 1996, which will have been reduced in net terms by $63 billion by the end of this financial year. Because of the reduction in Labor debt, the Commonwealth is now saving some $5 billion in interest payments. When this government was first elected, interest payments on debt were around $8.4 billion; today, they are $3.4 billion. It is an annual saving of $5 billion, which this government is able to direct to assistance for families, for children, for hospitals and for schools now that we are lifting the dead hand of that Labor debt from the community. The Australian economy continues to lead, with a balanced budget brought down two weeks ago and, in addition to that, income tax relief which was also announced in that particular budget, keeping Australia at the forefront of the developed economies of the world.